Opinion
58566
12-20-2017
Robert C. SCHMIDT, Plaintiff, v. Deborah A. SCHMIDT, Defendant.
Elizabeth Donahue, Glens Falls, for plaintiff. Wayne P. Smith, Schenectady, for defendant.
Elizabeth Donahue, Glens Falls, for plaintiff.
Wayne P. Smith, Schenectady, for defendant.
Robert J. Muller, J.
The marriage of plaintiff Robert C. Schmidt and defendant Deborah A. Schmidt was dissolved by Judgment of Divorce dated June 18, 2014 and entered on June 23, 2014, which Judgment incorporated and did not merge an oral stipulation of settlement dated May 16, 2014. Presently before the Court is defendant's motion by Order to Show Cause seeking to set aside the stipulation of settlement and vacate the Judgment of Divorce.
Turning first to a procedural issue, "[a] challenge to a stipulation of settlement which is incorporated but not merged into a judgment of divorce must be made by plenary action, and not by motion" ( Makara v. Makara , 65 AD3d 1018, 1019 [2009] ; see Candela v. Kiel , 33 AD3d 833, 834 [2006] ; Spataro v. Spataro , 268 AD2d 467, 468 [2000] ; Matter of Scalabrini v. Scalabrini , 242 AD2d 725, 726 [1997] ). Here, defendant has obviously failed to file a plenary action. With that said, however, " ‘a court's alteration of a stipulation absent a plenary action is not fatal’ " where the non-moving party fails to object and this Court observes that plaintiff has not objected to defendant filing a motion to challenge the stipulation of settlement, as opposed to a plenary action. As such, the defect is overlooked by the Court (see CPLR 2001 ; Fermon v. Fermon , 135 AD3d 1045, 1048 [2016] ; MacDonald v. Guttman , 72 AD3d 1452, 1455 [2010] ; Banker v. Banker , 56 AD3d 1105, 1107 n 2 [2008] ).
With respect to the substantive issues, while a stipulation of settlement in a divorce "will be more closely scrutinized by the courts than ordinary contracts given the fiduciary relationship between husband and wife, such an agreement will not be set aside unless there is evidence of ‘overreaching, fraud, duress or a bargain so inequitable that no reasonable and competent person would have consented to it’ " ( Empie v. Empie , 46 AD3d 1008, 1009 [2007], quoting Curtis v. Curtis , 20 AD3d 653, 654 [2005] ; accord Fermon v. Fermon , 135 AD3d 1045, 1048 [2016] ).
Here, defendant contends that the stipulation of settlement must be set aside because plaintiff failed to disclose several assets including, inter alia, bank accounts, an IRA account and a 401K account. Defendant further contends that she would not have entered into the stipulation of settlement had she not "felt very intimidated" by the Court. In this regard, when the parties appeared for trial on May 16, 2014, defendant indicated a desire to terminate her then counsel based upon her belief that "he did not conduct proper discovery". In response, the Court observed that such counsel was "the third attorney on [the] case" and then stated as follows:
"Mrs. Schmidt, ... I'm curious if you want to reconsider your position and allow [this attorney] to continue his negotiations or commence the trial in this case. It's possible, Mrs. Schmidt, if I don't adjourn the case, that you will be forced to try it yourself, and I don't know if you're familiar with the procedure law, the evidence law or the matrimonial law in the state, but I can guarantee you if you're representing yourself, I am bound not to help you and to treat you exactly as I would as a person with an attorney".
Defendant then permitted counsel to continue negotiations on her behalf and the stipulation of settlement was reached that day.
In opposition to the Order To Show Cause plaintiff first contends that defendant is "seeking to re-litigate issues which were ... litigated in Supreme Court during the original [d]ivorce proceedings and were very recently [litigated] before the Support Magistrate".
" ‘Collateral estoppel, or issue preclusion, precludes a party from relitigating in a subsequent action or proceeding an issue clearly raised in a prior action or proceeding and decided against that party, whether or not the tribunals or causes of action are the same. The doctrine applies if the issue in the second action is identical to an issue which was raised, necessarily decided, and material in the first action—and the plaintiff had a full and fair opportunity to litigate the issue in the earlier action’ " ( Corvetti v. Town of Lake Pleasant , 146 AD3d 1118, 1120–1121 [2017], quoting Parker v. Blauvelt Volunteer Fire Co. , 93 NY2d 343, 349 [1999] [internal quotation marks, ellipsis and citations omitted]; see Town of Fort Ann v. Liberty Mut. Ins. Co. , 137 AD3d 1389, 1390 [2016] ). " ‘This rule applies to claims actually litigated or that could have been litigated, and despite the fact that the claims are based on a different theory or seek a different remedy’ " ( Corvetti v. Town of Lake Pleasant , 146 AD3d at 1121, quoting Thomas v. City of New York , 239 AD2d 180, 180 [1997] [citations omitted] ).
"When this defense is raised, ‘[t]he burden rests upon the proponent of collateral estoppel to demonstrate the identicality and decisiveness of the issue, while the burden rests upon the opponent to establish the absence of a full and fair opportunity to litigate the issue in the prior action or proceeding’ " ( Corvetti v. Town of Lake Pleasant , 146 AD3d at 1121, quoting Parker v. Blauvelt Volunteer Fire Co. , 93 NY2d at 349 [internal quotation marks, brackets and citation omitted]; see Gadani v. DeBrino Caulking Assoc., Inc. , 86 AD3d 689, 691 [2011] ).
The Court concludes that plaintiff has satisfied his burden of demonstrating that the issues raised in the motion relative to his alleged failure to disclose assets are barred under the doctrine of collateral estoppel. Indeed, these issues were first raised by defendant in the original divorce proceeding, at which time she became concerned that plaintiff was hiding assets and shared these concerns with the Court. Specifically, when addressing defendant's desire to obtain new counsel at the May 16, 2014 court appearance, her attorney stated as follows:
"[Defendant] called me up yesterday afternoon and told me that she has located bank accounts belonging to [plaintiff] and that, see, I told you, you don't know what you're doing, you haven't found all his assets.
"Well, I called [plaintiff's counsel]. She confirmed there are no such bank accounts, at least according to her client.
"[Defendant] refuses to believe that too.
"There's also an issue of Mr. Ken Scrivens. [He] is a stock broker and financial planner with Mass Mutual in Albany. [Defendant] continuously told me that he had been manipulating accounts and assets and hiding monies and Mr. Ken Scrivens has all this information.
"Well, I got [plaintiff] to sign an authorization. I sent it to Mr. Scrivens. I talked to Mr. Scrivens on the phone. He sent me up everything that he had, which was an Oppenheimer account, which we're going to Majauskas anyway, but [defendant] refuses to believe. She still thinks there's hidden assets out there and she wants somebody to search out these assets, despite the fact that she has given me no indication, no hard, cold proof that there are assets".
Defendant herself then advised that Court as follows:
"I spoke with [Mr. Scrivens] yesterday. He specifically told me that he told [my attorney] that it's in Judy Carlson's hands at corporate headquarters and that he needed to wait. Okay. I cannot accept one piece of paper when [my attorney] ordered 10 years worth".
This foregoing discussion notwithstanding, defendant chose to enter into the stipulation of settlement later that same day.
The issues were again raised by defendant when she filed a pro se petition for the modification of spousal support in March 2017, which petition was referred to the Support Magistrate of Warren County in April 2017. At that time, defendant argued that she was entitled to an increased award of spousal support based upon plaintiff's failure to disclose assets at the time of the parties' divorce. The Support Magistrate, however, recently dismissed the petition with prejudice on October 18, 2017 finding, inter alia , that defendant "alleged that there was a failure to disclose assets at the time of the divorce but no proof was received relative to that issue".
Defendant currently receives spousal support payments in the amount of $225.00 per week, which payments are to continue until April 2019 under the terms of the stipulation of settlement.
This Court finds that defendant has failed to establish the absence of a full and fair opportunity to litigate the issues relative to plaintiff's alleged failure to disclose assets. In her reply papers, defendant states simply that the relief sought in this motion is different from the relief sought in her prior motion. This contention is misplaced, however, as the doctrine of collateral estoppel applies despite the fact that the claims are based on a different theory or seek a different remedy (see Corvetti v. Town of Lake Pleasant , 146 AD3d at 1121 ; Thomas v. City of New York , 239 AD2d at 180 ). Moreover, defendant has entirely failed to address the fact that these issues were raised in the original divorce proceeding.
Briefly, defendant also contends that the stipulation of settlement must be set aside because she would not have entered into it had she not felt intimidated by the Court. This contention—while not barred by the doctrine of collateral estoppel—is without merit. The prior Court's statement on the record simply advised defendant of the possibility that she would need to proceed with the trial pro se—a possibility of which she was surely aware. Indeed, she signed a consent to change attorney form on May 14, 2014—two days before the trial—whereby she relieved her attorney and agreed to proceed pro se.
This form was never filed, as defendant ultimately decided that counsel could continue to appear on her behalf.
Therefore, having considered the Affidavit of Deborah A. Schmidt sworn to October 25, 2017 together with Exhibits "A" through "Q" annexed thereto, submitted in support of the motion; Affidavit of Wayne P. Smith, Esq. sworn to November 6, 2017 submitted in support of the motion; Affidavit of Robert C. Schmidt sworn to November 21, 2017 together with Exhibit "A" annexed thereto submitted in opposition to the motion, Reply Affidavit of Wayne P. Smith, Esq. sworn to December 7, 2017 with a portion of the deposition transcript of Robert C. Schmidt (pp.11, 12, 13, 18, 19 & 20) annexed thereto in further support of the motion and oral argument having been heard on December 15, 2017 with Elizabeth Donahue, Esq. appearing on behalf of plaintiff and Wayne P. Smith, Esq. appearing on behalf of defendant it is hereby
ORDERED that the defendant's motion to set aside the stipulation of settlement and vacate the Judgment of Divorce is denied in its entirety, and it is further
ORDERED that any relief not specifically addressed has nonetheless been considered and is hereby expressly denied.
The above constitutes the Decision and Order of this Court.
The original of this Decision and Order has been filed by the Court together with the Order to Show Cause dated November 14, 2017. Counsel for plaintiff is hereby directed to promptly obtain a filed copy of the Decision and Order for service with notice of entry in accordance with CPLR 5513.